828064--4/15/2009--ROCKFORD

related topics

{customer, product, revenue}

{product, market, service}

{operation, international, foreign}

{stock, price, operating}

{personnel, key, retain}

{control, financial, internal}

{gas, price, oil}

{property, intellectual, protect}

{condition, economic, financial}

Aftermarket Mobile Audio Sales May Continue to Decline, Reducing the Potential Market Rockford is Seeking to Address A decline in discretionary spending likely would reduce Rockford s sales. Rockford may lose market share and its brand image may erode as Rockford manages the distribution channels for its mobile audio products. Any decrease in demand for Rockford amplifiers, subwoofers or speakers could significantly decrease sales. The loss of Best Buy, Nissan, or Mitsubishi as a customer or significant reductions in their purchases of Rockford s products would reduce sales. Rockford may lose sales and market share if it is unable to compete successfully against current and future competition, including products offered by aftermarket suppliers and by auto manufacturers. If Rockford does not continue to develop, introduce and achieve market acceptance of new and enhanced products, sales may decrease. Rockford s OEM sales and royalty revenue depends on demand for the vehicles in which Rockford s OEM systems are offered. A decline in demand for those automobiles is likely to reduce OEM sales and royalty revenue. Seasonality of mobile audio sales causes Rockford s quarterly sales to fluctuate and may affect the trading price of its stock. Rockford s financial results may fluctuate significantly, making financial forecasting difficult and making Rockford s stock price volatile. If Rockford fails to manage its inventory effectively, Rockford could incur additional costs or lose sales. Rockford s product supplies and international operations may be harmed by factors including political instability, currency exchange rates and changes in regulations that govern international transactions. Loss of an international distributor may disrupt Rockford s sales. Currency fluctuations may reduce the profitability of Rockford s foreign sales. Currency fluctuations may increase the cost of Rockford s products. If Rockford s supplies of products are interrupted, it may be unable to deliver its products to its customers. Rockford depends on a few suppliers for a large portion of its products. Interruptions in their ability or willingness to deliver products would reduce sales and damage customer relationships. Rockford may be unable to retain and attract key employees, which could impair Rockford s business. If Rockford is unable to enforce or defend its ownership and use of intellectual property, Rockford s business may decline. Rockford could suffer from internal control deficiencies. Rockford s executive officers and directors retain substantial control of Rockford, which may limit the liquidity and market price of its common stock.

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828064--4/15/2009--ROCKFORD_CORP